The Financial Conduct Authority (“FCA”) has described a discretionary commission arrangement (“DCA”) as an arrangement between lenders and brokers which allowed the broker to adjust the interest rates offered to customers. Typically, the higher the interest rate, the more commission the broker received. This practice was banned by the FCA in 2021, however they are now undertaking a review of the industry to understand whether there has been a widespread failure to comply with relevant requirements, resulting in financial loss or harm to consumers.
You may have an eligible DCA complaint if:
- You used car finance to buy a car before 28 January 2021, this includes conditional sale agreements and fixed-sum loan agreements.
- A discretionary commission arrangement was operated in relation to your agreement.
If you have an eligible DCA complaint, you will not receive a final response within the usual 8-week deadline. The FCA has extended the deadline until 25 September 2024.
If you’re unhappy with our final response, you’re able to take your complaint to the Financial Ombudsman Service (“FOS”). Usually, you have six months from the date of our final response letter to refer your complaint, however, as a result of the pause to complaint handling, this has been extended by up to 15 months.
For further information, you can visit the announcement on the FCA’s website here.
To make a complaint to us in relation to a DCA, please complete the below form: